Introductory Remarks by the First Deputy Managing Diriector David Lipton at the Sixth IMF Statistical Forum

IMF News, November 19, 2018

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Opening remarks to the 6th annual IMF Statistical Forum, theme “Measuring Economic Welfare in the Digital Age: What and How?”
Emphasizes statisticians and the IMF Statistics Department taking a central role in addressing measurement challenges posed by digitalization.
Notes prior year’s focus on measurement of GDP in the digital age, and positions this year’s discussion as advancing from GDP measurement to welfare measurement.

Traditional indicators "don't show the true size of the economy, and they don’t do a good job of gauging how well we are doing."
Digitalization raises stakes for measurement in the context of inequality and inclusive growth.
Specific measurement gaps:
- Free and nearly-free services from digital platforms are not measured in household consumption despite reducing cost of living and raising standard of living.
- Household nonmarket production and gender participation in the workforce need to be taken into account.
- Consumer savings from digital services may imply an overestimation of inflation in consumer price indices and underestimation of productivity growth.
Conceptual uncertainty about magnitudes: "it is not clear how much [technological improvements] do so, and how to measure the change."

Cites Paul Douglas (almost 60 years ago) saying “a large part of satisfaction cannot be plumbed by figures.”
References Robert Gordon’s observation: “some inventions are more important than others” as a caution about the magnitude of digital revolution impacts.
Mentions the 2008 study coordinated by Joe Stiglitz, Amartya Sen, and Jean-Paul Fitoussi on inclusive growth and sustainability.

Calls for enhanced welfare indicators and discusses proposals such as “GDP-plus” to capture positive welfare effects from the digital economy.
Key questions for research and measurement efforts:
- why does welfare from consumption grow more than consumption itself in the digital age?
- what is the value of free software, free online services, and digital data?
- what are the highest priorities?
- what is feasible to measure and realistic to ask national compilers?

Teleworking and “gig economy” platform jobs changing work patterns, especially for young people and women with children.
Mobile money in African countries bringing millions into the market economy and helping women to start and grow small businesses.
Personal anecdote: value of free video calls to family contrasted with trivial benefits like Solitaire.

Enhanced welfare measurement can guide policies that both foster innovation and manage technology’s effects on daily life, including regulatory tradeoffs between data privacy and incentives for innovation-driven growth.
Notes IMF research linking higher levels of inequality to less sustainable economic growth and less financial stability, underscoring the relevance of welfare measures to IMF work.
Emphasizes practicality: official statistics work must consider limited statistical capacity and resources of national agencies; IMF’s responsibility to work with these agencies to operationalize research.

Topics to be addressed over the next two days:
- conceptual frameworks for measuring welfare beyond GDP;
- the current state of play and the way forward for official statistics;
- the value of unpriced software and data;
- measuring welfare growth;
- detailed looks at e-commerce and fintech (covered tomorrow);
- presentations on how technology could raise inequality and challenge development opportunities (final session).
Anticipates progress from presentations and discussions to advance understanding of measuring welfare in the digital age.

Introductory Remarks by the First Deputy Managing Diriector David Lipton at the Sixth IMF Statistical Forum